BCC comments on GDP figures May 2019

Commenting on the latest UK GDP statistics, published today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“While there was a strengthening in UK GDP growth in the first quarter, the headline figure has been flattered by a temporary boost from stockpiling ahead of a possible no-deal exit, and so does little to alter the UK’s underlying growth trajectory. There was also a marked loss of momentum through the quarter from the strong January outturn to output contracting slightly in March.

“The latest data suggests that the UK economy remains imbalanced, with rising consumer spending set against a growing trade deficit. The UK’s net trade position is likely to remain under pressure over the near term as exchange rate volatility, Brexit uncertainty and the prospect of an escalating US-China trade war increasingly weigh on trading conditions for UK exporters.

“The pick-up in growth in Q1 is likely to prove to be a high point for the UK economy this year, with the unwinding of stockpiles together with the relentless uncertainty and increasing cost pressures caused by the ongoing Brexit impasse likely to squeeze economic activity in the next couple of quarters.

“It is therefore vital that ministers and parliament outline a clear path forward on Brexit and domore to tackle the long-standing domestic challenges for the UK economy - from weak productivity, to a growing skills gap and the need to invest in transformative infrastructure projects that will boost growth across the UK.”